Long Term Care
Peter Elliot
02-17-2011
Building Financial Security for a Lifetime
Northwestern Mutual Financial Network (NMFN) is the marketing name for the sales and distribution arm of The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) and its subsidiaries and affiliates. Peter J. Elliott, CLU, ChFC, AEP is an Insurance Agent of NM (life insurance, annuities and disability income insurance) and Northwestern Long Term Care Insurance Company, Milwaukee, WI, a subsidiary of NM (long-term care insurance). Registered Representative and Investment Adviser Representative of Northwestern Mutual Investment Services, LLC, 705 W Seventh Ave, Spokane WA 99204 509/459-9134 a wholly owned company of NM, broker-dealer, registered investment adviser and member FINRA and SIPC. There may be instances when this agent represents insurance companies in addition to NM or its affiliates.
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Northwestern Mutual
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-4797.
A Need-to-Know Checklist on long-term Care
Provided By: (Agent's Name), Northwestern Long Term Care Insurance Company
Long-term care planning is a particularly relevant issue in this economic environment of
market volatility and rising financial concerns. When people experience difficult times, we tend
to take stock of our fundamental needs and re-focus our attention on the basics.
You might consider the purchase of long-term care insurance for many reasons, but
essentially it helps to protect you and your loved ones from the financial and emotional costs of a
chronic illness or injury. Americans are living longer, increasing the likelihood of a chronic
illness. More people in the workforce are unable to provide the care needed by them or their
loved ones. Today, long-term care insurance is as basic as life insurance.
Once you have determined the necessity of long-term care insurance to protect you and
yours, the next step is to critically evaluate key components associated with the purchase of this
type of coverage. This three-part checklist offers questions you need answered.
The Representative
Working with a competent and trustworthy representative is essential to establishing a
long-term relationship. Every long-term care insurance decision should be based on your overall
financial picture.
· Has the representative conducted a thorough analysis of your situation? Each
person has a unique set of circumstances that determine the need for long-term care
insurance.
· Has the representative earned any of the financial services industry designations?
These designations demonstrate the highest commitment to professional development
(e.g., CLU, ChFC, CFP, CLTC).
The Company
The company's reputation and financial ratings are the next most important consideration
for buyers. The following questions are helpful when considering working with a company:
· Is the company financially strong, and what are its abilities to meet the obligations
of policyholders? The role of assigning financial strength ratings in this industry falls
primarily to four major, independent third party rating services:
o A.M. Best Company
o Standard & Poor'sŪ
o Fitch Ratings
o Moody's Investors Services
Materials that explain these ratings may be available directly from the company offering
long-term care insurance coverage, and are important to be aware of in looking at the variety of
options available in the marketplace.
· What is the company's history of service? When the company issues updated policies,
does it have a history of offering upgrades and enhancements to existing policyowners, as
well as to new clients?
· What is the company's reputation among consumers? Do you, friends, or family
members have other policies with the carrier, and are you pleased with the company's
service?
· Does the company offer a participating contract? Such contracts may provide
dividends to reduce future premiums if the company's actual experience proves to be
more favorable than pricing expectations.
The Policy
When choosing a long-term care insurance policy, it's important to have an
understanding of what the policy can offer.
· When will benefits payments begin? Benefits for most long-term care insurance
policies begin when the insured gradually or unexpectedly loses independence to the
point of needing substantial assistance or supervision. Insurance policies typically
require a deductible to be met before benefits are paid. With long-term care insurance,
this usually takes the form of elimination period, as the insured pays for care for a predetermined
number of days or weeks after independence has been lost until policy
benefits begin.
· How much money will I receive? Depending on how much coverage one elects, dollar
amounts will vary. Before electing coverage amounts, it's important that one become
aware of local care provider options and costs. Average cost of nursing home care
statistics usually reflect a semi-private room rate (i.e., multiple people in room), yet some
people prefer a private room in a higher end facility, which typically carries a higher
price tag. The most common benefits design reimburses for the amount of care expenses
incurred up to the selected coverage limits.
To plan for increasing costs of care, consumers can either pay additional premiums for
benefits that will automatically increase each year or buy additional coverage in the
future as the cost of care increases.
· How much does long-term care cost? Cost of the insurance depends on several choices
you make about the policy, your age and health. Long-term care insurance costs less if
you purchase it in your 40s or 50s. The cost should be compared to paying for long-term
care out of pocket. The average annual cost of a private room in a nursing home is
$76,650; Assisted Living facility is $41,160; home care varies based on hours of care
needed. 1
· How long will the benefits last? Buyers choose the maximum payout of the policy.
Most companies express this in a number of years (benefit period) and create a pool of
funds to pay for the care. The pool can increase each year if an inflation protection option
is chosen. Many policies also offer an unlimited maximum so that benefit payments will
continue for the entire duration of the claim.
The purchase of long-term care insurance is a personal and important decision.
Evaluating your personal and financial situation, with the assistance of a trusted, knowledgeable
financial representative, a solid company and your family will enable you to determine which
coverage is most appropriate. Taking this action based on the information in this checklist will
enable you to make a good, informed decision in choosing long-term insurance coverage that best
meets your needs.
1. Northwestern Long Term Care Cost of Care Survey, November 2008. Long Term Care Group, Inc.
www.nmfn.com/tn/learnctr-studiesreports-cost_ltc
# # #
Article prepared by Northwestern Long Term Care Insurance Co. with the cooperation of (First Name, Last
Name). (__________) is a Financial Representative with Northwestern Mutual Financial Network (Group Name if
exists) __________, based in (City, State). A financial representative is a licensed insurance agent. He/She is licensed
and appointed to sell long-term care insurance for Northwestern Long Term Care Insurance Co., Milwaukee, WI, a
subsidiary of Northwestern Mutual Life Insurance Company-Milwaukee, WI.) Northwestern Mutual Financial
Network is the marketing name for the sales and distribution arm of The Northwestern Mutual Life Insurance Company
(NM), Milwaukee, WI, and its subsidiaries and affiliates. To contact (name), please call (phone number) or email
him/her at (e-mail address).
Northwestern Long Term Care Insurance Company's long-term care insurance policy contains exclusions and
limitations. Northwestern Long Term Care Insurance Company and the Northwestern Mutual Financial Network are
not financially responsible for products issued by The Northwestern Mutual Life Insurance Company.
The purpose of this material is for the marketing and solicitation of insurance. Insurance Policy forms RS.LTC (0708)
and RS.LTC.ML.(0708). Policy form RS.LTC.ML (0708) is only available in NJ, NY, OH and PA.
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